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Bitcoin comes up a lot in cigar shops ... Earlier this week I spent 2hrs talking to a bc miner; I found this guy more reasonable than some. The conversation eve

by scrubs 5y ago

Bitcoin comes up a lot in cigar shops ... Earlier this week I spent 2hrs talking to a bc miner; I found this guy more reasonable than some. The conversation eventually opened up to several people and was quite pleasant. Takeaways: - miner agreed bc is not currency - Miner agreed that software is not a constant of nature. If I want to fork bc at current block and change bc supply from 21mm to 10 billion and offer miners 30% premium over classic bc ... Nothing stops me. - for a random person such a move may be dubious ... But not if Goldman Sachs or the nyse did it. Thus the value of classic BC can radically change if serious competition arises. Such competition might push down classic bc to dollar value. As such the claim bc isn't deflationary I find iffy at best - in classic bc as things stand now ... What happens when all 21 million coins are mined? At that point all miners can do is take a percentage of money they mine. If the transaction is too small they might say screw it. If they only work on big transactions it'll be for the relatively more affluent ppl buying rolexes, art, and yatchs. - miner agreed bc is too slow ... It can't compete with cc rates. There is operational inertia to increased use - Miner said it costs ~$15k to mine a coin. At current bc to USD there's lots of profit for him Some other things that we could not agree on: - miner made classic claim that bc is no different from usd; fiat USD is not asset or gold backed like bc. However he agreed bc isn't currency. So no crisp conclusion arose here. My stand however was that bc would have come and gone except that people believe it's valuable --and-- they can convert it to real bonafide fiat currency. If either one of those fail bc is noise; nobody would care. It's not clear here why bc to USD is possible. Where's the cause and where's the effect? Is it that bc is something (cause) and converting to USD is effect? Or rather did ppl merely believe bc is valuable (no cause) and the fact those same ppl accepted usd for bc and vice versa was the effect that caused bc to seem important? I think it's the latter case in which case bc is a shell game, a elaborate multi-level marketing game. - on the question of what happens if a Goldman Sachs gets into the game ... The miner implied (I inferred) that it'd be good for much the same reason. While miners like him might get a hit in short term because ppl flock to a serious crytpo player GS, it'd actually be good long term because the GS brand gives gravitas to crypto that bc by itself doesn't have. Here again cause and effect is subtle. - fiat usd is a reserve currency and integrated into the us economy and world economy at fantastically higher numbers and complexity. It has had to respond to economic cycles, fiscal problems, stock market crashes and numerous other pressures. Bc has none of this. The idea that bc would survive as-is with a fixed 21 million bc in the real world ... is pretty silly. Bc isn't the locked in deflationary currency that could survive as is not subject to external pressures claimed. Finally: - it's worth pointing out bc isn't as anonymous as claimed - miners are fairly centralized. And here problems with block sizes and other aspects of running the block chain have arisen between users and miners

saurik 5y ago
> Miner agreed that software is not a constant of nature. If I want to fork bc at current block and change bc supply from 21mm to 10 billion and offer miners 30% premium over classic bc ... Nothing stops me. To make a change to the actual behavior (such as to make new money or move money without authorization)--as opposed to merely the order of events (which is important, of course: it allows you to change which of two parties got money if someone tried to send money to both and only had enough for one)--requires the users to all buy into your new fork, not merely the miners; this is something many people seem to get wrong, but it is the most important property to understand: the rules are the rules and no one can change them without pretty extreme buy-in (which does happen, but is quite difficult to pull off).
- scrubs 5y ago
  You're 100% right. That's why I argued the GS case. Competitor or miner A's profitability could change in a heart beat if a new competitor with gravitas entered the market. They could take a lot of market share and induce existing miners to switch block chains. Since all one has to do is have power, computers (agree: gross simplification there) one's business could change easily. Using BC as collateral, for example, isn't the slam dunk it seems. As I say the miner agreed BC isn't currency; the fallback is BC is an asset. But it's an asset that seems fundamentally more risky than a house. This contrasts with AWS, Nvidia, GM, or AIG: it's not so easy for new comers to take market share. You gotta have a lot more going for you than a data center monthly rental bill.
  - saurik 5y ago
    If all the miners in the world are mining something, it doesn't really matter much if the users (who are paying for the security through inflation) don't want to agree to the new rules. In fact, the miners that defect to your system are all just hurting themselves: no one wants their bogus blocks, and so they are just throwing energy away. Sure, you are supposedly paying them (by your tweaked rules that gives them more reward per block), but you are paying them in a currency that is incompatible with the software used by every exchange, every bank, every supermarket, and every other user, who all see your "more profitable" blocks as "invalid"... they are buying real energy and you are giving them a currency no one has heard of or accepts in exchange for goods and services. What makes these networks hard to get everyone to switch between, even when they suck, is thereby all of the momentum of software deployment and brand recognition and "belief in the value of such" that they have. This network effect is extremely difficult to quickly replicate and is a massive barrier to entry for not just newcomers but even mere upgrades... bug fixes to these protocols require everyone to agree! Truly: if you could just create a new network that was slightly better or which paid miners slightly more per unit (which isn't real value) and somehow immediately sweep away all of the miners, Bitcoin--which is clearly an antiquated piece of shit to most of the people who work in this space--wouldn't exist, as not only do new networks come out every day that offer small improvements but new networks exist that offer large improvements, and it is extremely painful to get anyone to switch.

by scrubs 5y ago

saurik 5y ago

> Miner agreed that software is not a constant of nature. If I want to fork bc at current block and change bc supply from 21mm to 10 billion and offer miners 30% premium over classic bc ... Nothing stops me. To make a change to the actual behavior (such as to make new money or move money without authorization)--as opposed to merely the order of events (which is important, of course: it allows you to change which of two parties got money if someone tried to send money to both and only had enough for one)--requires the users to all buy into your new fork, not merely the miners; this is something many people seem to get wrong, but it is the most important property to understand: the rules are the rules and no one can change them without pretty extreme buy-in (which does happen, but is quite difficult to pull off).

scrubs 5y ago
You're 100% right. That's why I argued the GS case. Competitor or miner A's profitability could change in a heart beat if a new competitor with gravitas entered the market. They could take a lot of market share and induce existing miners to switch block chains. Since all one has to do is have power, computers (agree: gross simplification there) one's business could change easily. Using BC as collateral, for example, isn't the slam dunk it seems. As I say the miner agreed BC isn't currency; the fallback is BC is an asset. But it's an asset that seems fundamentally more risky than a house. This contrasts with AWS, Nvidia, GM, or AIG: it's not so easy for new comers to take market share. You gotta have a lot more going for you than a data center monthly rental bill.
- saurik 5y ago
  If all the miners in the world are mining something, it doesn't really matter much if the users (who are paying for the security through inflation) don't want to agree to the new rules. In fact, the miners that defect to your system are all just hurting themselves: no one wants their bogus blocks, and so they are just throwing energy away. Sure, you are supposedly paying them (by your tweaked rules that gives them more reward per block), but you are paying them in a currency that is incompatible with the software used by every exchange, every bank, every supermarket, and every other user, who all see your "more profitable" blocks as "invalid"... they are buying real energy and you are giving them a currency no one has heard of or accepts in exchange for goods and services. What makes these networks hard to get everyone to switch between, even when they suck, is thereby all of the momentum of software deployment and brand recognition and "belief in the value of such" that they have. This network effect is extremely difficult to quickly replicate and is a massive barrier to entry for not just newcomers but even mere upgrades... bug fixes to these protocols require everyone to agree! Truly: if you could just create a new network that was slightly better or which paid miners slightly more per unit (which isn't real value) and somehow immediately sweep away all of the miners, Bitcoin--which is clearly an antiquated piece of shit to most of the people who work in this space--wouldn't exist, as not only do new networks come out every day that offer small improvements but new networks exist that offer large improvements, and it is extremely painful to get anyone to switch.